Pembina Consolidated Silver Mining Co. v. Pennsylvania - 125 U.S. 181 (1888)
U.S. Supreme Court
Pembina Consolidated Silver Mining Co. v. Pennsylvania, 125 U.S. 181 (1888)
Pembina Consolidated Silver Mining and Milling Company v. Pennsylvania
Argued February 16, 1888
Decided March 19, 1888
125 U.S. 181
The exaction of a license fee by a state to enable a corporation organized under the laws of another state to have an office within its limits for the use of the officers, stockholders, agents, or employs of the corporation does not impinge upon the commercial clause of the federal Constitution (Article I, § VIII, clause 3), provided the corporation is neither engaged in carrying on foreign or interstate commerce nor employed by the government of the United States.
Corporations are not citizens within the meaning of the clause of the Constitution declaring that the citizens of each state shall be entitled to all privileges and immunities of citizens in the several states, Article IV, § II, clause 1.
A private corporation is included under the designation of "person" in the Fourteenth Amendment to the Constitution, section I.
The provisions in the Fourteenth Amendment to the Constitution, Section I, that "No state shall deny to any person within its jurisdiction the equal protection of the laws" do not prohibit a state from requiring for the admission within its limits of a corporation of another state such conditions as it chooses.
The only limitation upon the power of a state to exclude a foreign corporation from doing business within its limits, or hiring offices for that purpose, or to exact conditions for allowing the corporation to do business or hire offices there, arises where the corporation is in the employ of the federal government or where its business is strictly commerce, interstate or foreign.
The Court stated the case as follows:
In May, 1881, the Pembina Consolidated Silver Mining and Milling Company was incorporated under the laws of Colorado, with an authorized capital of one million dollars, for the purpose of carrying on a general mining and milling business in that state. Its principal office is in Alpine, Colorado, and since July 1, 1881, it has had, and still has, an office in the City of Philadelphia "for the use of its officers, stockholders, agents, and employees." On the 31st of October, 1881, the Auditor General and Treasurer of Pennsylvania assessed a tax against the corporation for "office license" from July 1, 1881, to July 1, 1882 at the rate of one-fourth of a mill on each dollar of its capital stock, which amounted to $250, and added to it a penalty of $125 for failure to take out a license. This tax was assessed and penalty imposed under section sixteen of the Act of the Legislature of the Commonwealth approved June 7, 1879, entitled "An act to provide revenue by taxation." The section provides as follows:
"That from and after the first day of July, A.D. 1879, no foreign corporation, except foreign insurance companies, which does not invest and use its capital in this Commonwealth shall have an office or offices in this Commonwealth for the use of its officers, stockholders, agents, or employees unless it shall first have obtained from the Auditor General an annual license so to do, and for said license every such corporation shall pay into the State Treasury, for the use of the Commonwealth, annually, one-fourth of a mill on each dollar of capital stock which said company is authorized to have, and the Auditor General shall not issue a license to any corporation until said license fee shall have been paid. The Auditor General and State Treasurer are hereby authorized to settle and have collected an account against any company violating the provisions of this section for the amount of such license fee, together with a penalty of fifty percentum for failure to pay the same, provided that no license shall be necessary for any corporation paying a tax under any previous section of this act, or whose capital stock, or a majority thereof, is owned or controlled
by a corporation of this state which does pay a tax under any previous section of this act."
It is conceded that the corporation is not within the exception of the proviso of the act, as it pays no tax under any previous section.
From this assessment, or settlement of the account against the corporation, as it is termed in the record, the corporation appealed to the Court of Common Pleas of Dauphin County on the ground, among others, that the said 16th section of the revenue act is in conflict with the clause of the Constitution of the United States declaring that "Congress shall have power to regulate commerce with foreign nations and among the several states," Article I, Section 8, clause 3, and also with the clause declaring that "The citizens of each state shall be entitled to all privileges and immunities of citizens in the several states," Article IV, Section 2, clause 10. In that court, the Commonwealth filed a declaration in debt against the corporation for the amount claimed. It does not appear from the record that any answer or plea was filed to this declaration, but it is assumed that issue was joined, as counsel of the parties agreed that a trial by jury should be waived, and that the case should be submitted to the decision of the court, subject to a writ of error as in other cases at the option of either party.
The Court of Common Pleas affirmed the validity of the assessment, and the corporation took the case on writ of error to the Supreme Court of the Commonwealth, which affirmed the judgment of the Common Pleas. To review this judgment, the case is brought here.